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October 1, 2012

Washington Health Policy Week in Review Archive 5d16140f-f961-40e8-852e-32975468cbb7

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For U.S. Workers, Employment-Based Health Insurance Continues to Decline, Report Says

By Jane Norman, CQ HealthBeat Associate Editor

September 27, 2012 -- When it comes to health insurance coverage for those under 65 in the United States, research released last week shows the trends are like two trains rushing past one another: Coverage in public programs is growing, while traditional private insurance through employers is contracting.

That will continue, predicts a report written by Paul Fronstin, of the nonpartisan Employee Benefits Research Institute (EBRI), who dove deep into recently released census numbers. "Until the economy gains enough strength to have a substantial impact on the labor market, a rebound in employment-based coverage is unlikely," the report said.

EBRI also found that those Americans who still have employer-based insurance are far more likely to earn more than $75,000 a year, work in a managerial or professional occupation, be employed by a big firm—and be white. Where a person or his or her spouse works is the most important factor in determining whether he or she is insured.

The report by the organization gives a glimpse into the makeup of the working-age uninsured population likely to be enrolling in Medicaid or buying policies in the state-based or federal health insurance exchanges once they are up and running in 2014 under the health care law (PL 111-148, PL 111-152). Many are in the South. For example, in 13 states, uninsured people made up 20 percent or more of the population between 2009 and 2011, said the report. Those states are Arkansas, Arizona, California, Florida, Georgia, Louisiana, Mississippi, Montana, Nevada, New Mexico, Oklahoma, South Carolina and Texas.

The report also says that in general, employers want to provide health insurance because it makes for a better workforce - but may reconsider if the economy continues to be sour or the health care law "changes the value proposition" of offering insurance, thus speeding up the trend toward less employer-based insurance.

Health insurance is the benefit most valued by employees and provides them with a hedge against devastating losses from sickness, notes Fronstin. Employers offer it to increase productivity and raise esteem. But that may shift, the report cautions, because "the recent enactment and ongoing implementation of federal health reform legislation may change that equation." Employers are penalized under the law for not offering affordable health insurance, but opponents of the overhaul have warned that many businesses may decide to pay the penalty rather than sustain the costs of adding coverage. Studies have been mixed on whether that will happen.

The institute, a private group based in Washington that studies issues such as health, retirement and savings, based its study on the latest 2011 numbers from the census on the uninsured, focusing on the non-elderly population, those under 65. It found that employer-based health insurance for this group shrank again in 2011, to 58.4 percent, compared to 69.3 percent in 2000.

At the same time, EBRI said, 22.5 percent of the non-elderly in 2011, or more than a fifth of the population, were enrolled in a public program. That's compared to 14.1 percent in 1999. Sources of coverage for this group include Medicaid, the Children's Health Insurance Program, Medicare for people with disabilities, Tricare and veterans' health benefits.

And 7.1 percent of Americans bought their insurance in the individual market, a target for major overhaul in the health care law.

Fronstin noted that overall, the percentage of people under 65 with some kind of insurance coverage actually increased between 2010 and 2011, the first time that's happened since 2007, even if it's a slight rise. Now 82 percent of these Americans have health insurance, up from 81.5 percent in 2010. But 18 percent still lack insurance, though that, again, was slightly better than the 18.5 percent in 2010, the highest share of people without insurance between 1994 and 2010, the report said.

Who has employer-based health insurance, and who has the best health insurance? The report says 71.8 percent of people in families headed by a full-time, full-year worker had employer-provided insurance, compared to 34.2 percent of those in families whose head works part of the time and just part of the year.

The size of the employer matters, too. Nearly two-thirds of the uninsured—61 percent—either were self-employed or worked at companies with fewer than 100 employees, the report said.

Race is a stark divider. The report said 66.9 percent of whites had employer-based coverage in 2011, compared to 46.7 percent of blacks and 38.8 percent of Hispanics.

As for profession, 33.3 percent of people who work in agriculture, forestry, fishing, mining and construction in 2011 were uninsured, which was even worse than people employed in the service industry—23.4 percent of them were uninsured. Among those in wholesale and retail trade, 19.5 percent were uninsured, and 15.7 percent of those in manufacturing lacked insurance.

It's about money, too. A third of people without insurance were in families with annual incomes of less than $20,000. That compared with 6.7 percent of those in families with annual incomes of $75,000 or more, the report said.

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Shining a Light on the Dark Side of Health IT's Irreversible Adoption

By John Reichard, CQ HealthBeat Editor

September 28, 2012 -- Unlike several years ago, there's now little doubt that health information technology will be widely adopted by doctors and hospitals. And among pace-setting medical practices that deliver team-based care, there's no question about its power to cut costs and improve health.

But there's a dark side: Doctors face burnout from working longer days because of IT. And the time they spend staring at their computer screens during office visits, rather than giving their patients quality face time, undermines good care.

Those were the takeaways from a Capitol Hill presentation by a panel of experts that reviewed where doctors are now in adopting electronic health records and other health IT, and whether it's actually delivering on its promise.

Perhaps the most startling statement was made by Christine Sinsky, an internist with the Medical Associates Clinic in Dubuque, Iowa, one of a panel of speakers that otherwise strongly touted IT's benefits. The event was sponsored by the nonpartisan Alliance for Health Reform.

"It's this issue of continuous partial attention," she said. Undivided attention "is the essence of good care," but because doctors spend so much time looking at computer screens entering data while the patient sits nearby, "we have been crowding out some of that essential interaction," she said. "Work that used to be done by the transcriptionist, by a receptionist, by a billing clerk, by the pharmacist, much of that work has now been transferred to the shoulders of the physicians and the nurses on the clinical team. And that has become increasingly unsustainable.

"In fact, I'm concerned that we risk losing the majority of our time together with our patient on data entry and clerical kinds of tasks."

Sinsky, who also is an IT consultant, said that over the past several years she's visited more than 40 doctors and nurses in different innovative medical practices around the country that are on the front edge of delivering new models of care. "Almost uniformly, primary care physicians are taking two hours of in-box work home to do every night after their children go to bed. I think this has profound implications for career satisfaction. And that, in turn, has profound implications for the primary care workforce of the future" and its ability to deliver better care at lower cost for the nation, she said. "We would never go back, but we have to keep moving forward. We can't consider that we're there yet" on living with the new technology.

Sinsky's comments struck a chord with another speaker, Andrew Racine, chief medical officer at the Montefiore Medical Center in the New York City borough of the Bronx.

"I am so happy that Dr. Sinsky's here, because she has raised one of the most critical points with the regard to the use of this technology at the exam room," Racine said. "You just simply cannot do what you used to do when you're using a computer versus doing something on paper."

Their comments were notable because they otherwise stressed how key IT has been to improving the health of their patients. Racine said that in the Bronx, the poorest county in the country, IT has allowed better sharing of results among doctors in the Montefiore system of newborn screening, assessment of mental and emotional health of toddlers and school-age children, and screening for sexually transmitted diseases among adolescents. Improving population health is "really what the promise of this technology is all about," he said.
Sinsky described the "bumpy road" with health IT as a solvable first-generation problem.

she said the new, powerful technology "demands a new delivery model, and it demands a different model of support staff," she said. "It cannot be a physician and a patient and a computer in the room alone."

Sinsky said she would love to see community colleges "ramp up their training of associate's degree RNs and other clinical support staff who've had specific training in information management" to enter that data during office visits.

She also said that some of the practices she's visited have adopted a model in which a medical assistant or a nurse will join the physician in the room and help with documentation. "That has been one of the stronger new models that we have identified."

Sinsky did say that the electronic health record has been one of the essential components in making her clinic one of the nation's top performing health systems. It's much easier to share information more rapidly with patients, she said. "So whenever a patient leaves my office with a change in medication we give them an updated medication list. So they're much less likely to have confusion, or make an error around their own medication management." Also, "we do test tracking, so it's very uncommon for any test to fall through the cracks and not have been reported back to the patient. We want to leave nothing to chance in the care of our patients."

Sinsky added that she fully supports the recent stage two "meaningful use" rule issued by CMS but objected to its prohibition on reception staff doing the physical keyboarding of orders for lab tests and X-rays.

Farzad Mostashari, the National Coordinator for Health Information Technology at HHS, delivered an upbeat assessment of health IT's adoption.

Extension centers that help providers adopt health IT throughout the country are now working with 147,208 primary care providers, he said. Seventy percent of small doctor's offices in rural areas are working with the centers to adopt IT, he said. Mostashari expressed hope that close to half of the health care delivered in the U.S. would soon be from providers using IT systems.

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States Race Toward Monday Deadline to Pick Their Benchmark Plans

By Jane Norman, CQ HealthBeat Associate Editor

September 28, 2012 -- It's crunch time for states that are working to select their benchmark plans for essential health benefits, with a Monday deadline looming for a decision to be submitted to federal officials.

According to a roundup by Avalere Health, 16 states have identified their proposed benchmark plans that will be the models for individual and small-group insurance coverage in each state's health insurance exchange. Another 17 have identified their potential benchmarks plans so the final tally of states that submit proposed benchmarks to the Department of Health and Human Services (HHS) could still rise.

The states identified by Avalere as having picked benchmark plans are California, Oregon, Washington, Utah, Colorado, Arkansas, Mississippi, Michigan, Virginia, Delaware, Maryland, Connecticut, Rhode Island, New Hampshire, Vermont, and the District of Columbia.

However, HHS officials also have told states that the deadline to pick a plan by the end of the third quarter of the year is a "soft" one since it was not set out as a formal regulation, according to a letter sent earlier this week by Kansas Insurance Commissioner Sandy Praeger to Gov. Sam Brownback. Praeger also said in the letter that HHS officials told states during a Sept. 14 conference call that shortly after the deadline, HHS will begin reaching out to states that haven't submitted benchmarks to discuss a default plan. Under guidance HHS issued earlier this year, the default would be the largest plan by enrollment in a state's small-employer group market.

During the last few days, exchange boards in several states have finished up the details of what will be included in their essential health benefits. Under the health care law (PL 111-148, PL 111-152), beginning in 2014, all non-grandfathered insurance plans in the individual and small-group markets have to cover a list of essential health benefits. The plans will be available in the exchanges, which are to be up and running by January 2014.

Plans are required to cover 10 categories of benefits: ambulatory patient services; emergency services; pediatric services, including vision and dental; maternity and newborn care; prescription drugs; rehabilitative, habilitative services and devices; lab services; hospitalization; preventive and wellness services and chronic disease management; and mental health and substance-use disorder treatment.

States are to choose among four benchmark plans currently operating within their borders. States could pick one of the three largest small-group plans by enrollment; one of the three largest state-employee health plans by enrollment; one of the three largest federal employee health plan options by enrollment; and the largest HMO plan by enrollment.

HHS officials said earlier this year that this approach of using benchmark plans will be followed in the early implementation years of 2014 and 2015 and reevaluated later. The approach of letting states decide on their benchmark plans has worried advocacy groups concerned that benefits will vary widely from state to state, but state officials generally have praised HHS for giving them the flexibility to set their own standards.

The benchmark requirement has produced a standoff in Kansas. In her letter, Praeger also submitted to Brownback her analysis for the Kansas essential health benefits benchmark plan, suggesting it resemble a Blue Cross Blue Shield of Kansas plan, the largest small-group plan in the state, along with children's vision and dental care added. Brownback, however, according to news reports, is declining to make any decisions until after the November election.

In New Hampshire, the Union Leader reports that the Joint Healthcare Reform Oversight Committee, a body made up of lawmakers, voted to approve a local health plan, Matthew Thornton Blue, as the benchmark. It is projected to cost $498.79 a person a month, the newspaper said.

A chart put together by State Reform, an online group organized by the National Academy for State Health Policy for state officials working to implement the health care law, says that questions remain about what happens next, such as what a state does if HHS determines its plan is discriminatory and whether final HHS approval of the benchmark proposals will come by the end of the year.

Meanwhile, Sen. Charles E. Grassley of Iowa and Rep. Fred Upton of Michigan, both Republicans, sent a letter to HHS Secretary Kathleen Sebelius asking for an explanation of "what appears to be inadequate or non-existent oversight" of $1 billion in grants awarded to states for constructing their health insurance exchanges. They said they are concerned by reports of "questionable expenses," such as a contract by the state of California with a public relations agency to try to get prime time TV shows to promote the health care law. HHS hasn't given states enough guidance on how the exchange grant money is to be used, they said.

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HHS Awards a Quarter-Billion Dollars More for Exchange Grants

By John Reichard, CQ HealthBeat Editor

September 27, 2012 -- Health and Human Services officials recently announced $224 million in grants to five states and the District of Columbia to fund development of insurance exchanges or exchange-related operations.

Each of the entities except one—Arkansas—has notified HHS that they intend to operate their own exchange to offer coverage options to uninsured Americans and small businesses under the health care law (PL 111-148, PL 111-152).

The awards bring to $2.2 billion the amount of money HHS has granted to states under the health care law for exchanges.

Arkansas is getting $18.6 million. It's partnering with HHS to offer state residents coverage through the exchange to be run by the federal government—called the "federally facilitated exchange," or the FFE.

Under the new grant, Arkansas will be responsible for certifying health care plans sold in the state through the FFE. The state will upload the plans to the FFE in time for the first open enrollment period under the health care law, which begins Oct. 1, 2013.

Arkansas will run the "Arkansas In-Person Assister Program" to help consumers understand, compare and enroll in plans. HHS will manage the website and the consumer hotline. The Arkansas money also will pay for an outreach and education program to encourage enrollment in the federal exchange.

Arkansas Gov. Mike Beebe, a Democrat, recently became the first southern governor to endorse the Medicaid expansion under the law, according to a Sept. 25 Associated Press report.

Other awards are going to:

  • The District of Columbia will receive $72.9 million to hire staff and consultants to manage the creation of its exchange and its first year of operations. The exchange is expected to serve 225,000 District residents. "A substantial portion of the funding will be used to develop an IT system," an HHS grant summary said.
  • The Colorado Health Benefit Exchange will receive $43.5 million "to meet deadlines for [plan] certification, testing and deployment of systems, and operations."

Sen. Michael Bennet, D-Colo., said in a written statement that "hundreds of thousands of Coloradans who now don't have insurance or who have insurance in the unstable, high-cost individual market will have a range of more affordable options through the new exchange."

  • Massachusetts will get $41.7 million to help update its existing exchange to one compatible with the health care law. Much of the money will go to "build a single, integrated, real-time" system to determine eligibility for Medicaid or federal subsidies to buy private coverage. The money also goes to develop a "robust risk-adjustment program" to shift money from plans with higher-cost, sicker enrollees to those with healthier, low-cost members.
  • Minnesota will get $42.5 million to develop broker and consumer assistance services related to its exchange; test measures to assess the cost and quality of plans to help consumers make comparisons; and assess the security of IT systems, among other functions.
  • Kentucky will receive $4.4 million for, among other things, developing a consumer assistance program.

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Insiders Differ over Timing, Scope of Health Care Law After the Election

By John Reichard, CQ HealthBeat Editor

September 24, 2012 -- How do some of health policy's savviest insiders see the fate of the health care law after the elections—whether its main provisions will start on time, how it might change, to what extent it will be implemented, and whether it will help control costs?

Views on those points differed considerably at a Harvard School of Public Health forum hosted by the Washington, D.C., office of the law firm Alston and Bird last week. No consensus emerged, but listeners likely came away with a more realistic sense of future policy fights and how they might play out.

Among the oft-quoted crystal ball gazers: former Medicare and Medicaid administrators Tom Scully and Gail Wilensky; former Senate Majority Leader Tom Daschle; Chris Jennings, top health policy aide in the Clinton White House; Harvard School of Public Health professor Robert Blendon; former Congressional Budget Office health analyst Joseph Antos; and former House Energy and Commerce Chairman Billy Tauzin, who also served as head of the Pharmaceutical Research and Manufacturers of America.

Antos, now a scholar at the American Enterprise Institute, said there is "tremendous uncertainty" about the start of key coverage provisions of the law. "Despite what you hear from the administration, it really is unclear whether the Affordable Care Act will roll out on schedule."

States have a long, long way to go on implementation, Antos noted. The Obama administration can say states are waiting until after the election to move ahead, but there's no penalty if they miss deadlines, he noted—and "many of the states can't possibly meet those deadlines."

States haven't run insurance exchanges before, he added. A federal exchange is supposed to step in to offer coverage options and subsidies to residents of states that don't set up their own new marketplaces. But "I am discounting the federal exchange; we haven't seen any sign of it," he said. "It may already be too late."

Because of implementation difficulties, Antos said, a second-term President Obama may well sound like a Republican. "He's going to say, 'We have to let the states go at their own pace,'" he predicted.

Antos also said he sees little in the health care law (PL 111-148, PL 111-152) to change Medicare's spending trajectory. "The ACA didn't change anything" structural about Medicare, he asserted. "There are some nice ideas in there," but "they are not new ideas; 25 years ago, I was working on some of them myself."

Antos said it takes a long time to do bundled payments, a payment change the health law tests to spur provider teamwork to improve efficiency. As for accountable care organizations (ACOs) promoted by the law, "we did a demonstration on that," he said. "CBO didn't think it came out too well."

Antos was referring to a recent Medicare demonstration program that tested how 10 physician groups performed in response to incentives to control the costs and improve the quality of care. Antos did say though that the health care law's payment experiments are worth doing: "It doesn't mean we shouldn't try."

Jennings had little patience for the gloomy scenario Antos laid out. "I'm actually so much more optimistic than many other people are" about the impact of the health care law, he said. He noted that over the years both parties have affirmed the need for pursuing cost control elements of the law, such as bundled payments, accountable care organizations and quality measures. Two years after passage of the law, the number of ACOs in Medicare has mushroomed to 150, he said. "The idea that we would go backwards on some of this success to me seems ludicrous."

Jennings pointedly noted other provisions of the health care law Republicans have supported when they appeared in initiatives other than the overhaul, such as exchanges and rolling back some of the exclusion from taxation of employer health insurance outlays.

"Now we're going to say we don't want to do that?" he said. "Give me a break."

Alan Weil, executive director of the National Academy for State Health Policy, hinted that doubts about state implementation may be overstated.

For example, he countered the skeptical view Antos expressed about exchanges and whether they will open in time for the expansion of health coverage that begins on Jan. 1, 2014. "What functions are you thinking they won't be able to do?" he asked.

There are a dozen states that are poised to implement" exchanges, he added. "It's a dozen, not 50," he acknowledged. But "the question is not whether Jan. 1 is nirvana, the question is whether we are making enough progress that people notice it."

Cost Changes Murky

Wilensky focused in her comments on cost control. We are seeing a marked spending slowdown, "but what we don't know is if we are seeing a lot of impact on costs right now" from public and private sector efforts to rein in spending growth, she said.

The real question is whether the slowdown is sustainable, she said. Policy makers should not confuse lower Medicare reimbursement under the health care law with lower costs, she emphasized. "Is that sustainable? Probably not. We've tried that trick before, and it usually falls apart." Wilensky was referring in part to the 1997 budget control law (PL 105-33) that cut Medicare spending—but some of that money was later restored. Former Medicare and Medicaid administrator Nancy Ann DeParle has asserted, however, that the 1997 law did reduce Medicare spending growth in the long term.

Wilensky noted that private sector spending dropped sharply from 1991 to 1997 as employers and insurers embraced tougher managed-care approaches. "It was effective, but it was not much appreciated," she said. A backlash resulted, in which the public's message to managed care was: back off.

That doesn't mean new cost control efforts are doomed. But "it's one thing to find savings, it's another to say they are sustainable." Wilensky says she likes the cost control pilot programs in the health law but said the statute lacks enough of a "forcing action" to make sure they are implemented if they work.

In his remarks, Tauzin raised the possibility that Medicare policy will be debated in a much different legislative environment in 2013. He said senior anxiety over the impact of the health care law on Medicare could make 2012 a "wave election" that adds Republican control of the White House and Senate to that it gained in the House in 2010.

Tauzin ascribed the 2010 election results in large part to senior concern over Medicare cuts in the health care law. Seniors, who tend to vote Republican, made up 23 percent of the vote in the 2010 congressional elections, up from 19 percent previously, he said.

Former Michigan Governor John Engler, a Republican who now heads the Business Roundtable, said that the health care law is too costly and that its expansion provisions will have to be cut back. "It's absolutely the case," he said, that many businesses will stop offering health coverage and instead pay penalties for not insuring their workers, which will save them money. He said he can also foresee more employers switching their workers from full-time to part-time to avoid coverage requirements under the law. Daschle countered that in Massachusetts, which mandates coverage, employers have actually increased, not decreased, their coverage.

Blendon shied away from making predictions about election outcomes but said that polling shows Obama and GOP candidate Mitt Romney tied on the issue of the economy and that other issues such as health care could then prove to be deciding factors. More than one in seven voters picks Medicare, Medicaid or abortion as their top issue in the election, he noted.

He said Romney took a big gamble with the selection of House Budget Chairman Paul D. Ryan, R-Wis., to be his running mate. Ryan has shifted the concern of seniors from the Medicare cuts in the health care law to Ryan's idea of converting Medicare into a premium support system. Doing that "has incredibly little public support," Blendon said. Asked about Tauzin's wave prediction, Blendon said seniors are increasingly focused on Ryan's premium support plan, and not in a way that helps Republicans. Seniors do not believe the plan would exempt them, despite Ryan's assurances that they would be exempted, Blendon said. For his part, Scully predicted that the health care law will be delayed by a year as part of a deficit reduction agreement in the summer of 2013. He forecast that Republicans will agree to revenue increases but only if the health care law is delayed. Scully says that would save hundreds of billions of dollars over time in federal spending. But Daschle expressed doubt about that scenario, saying that it would be impossible to reopen the health care law without also inviting pressure for many other changes and that lawmakers won't do it.

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New Initiative Seeks to Reduce Hospitalizations for Dually Eligible Patients

By Rebecca Adams, CQ HealthBeat Associate Editor

September 27, 2012 -- Federal officials announced last week that seven nursing facilities will receive grants to enable them to test models to reduce avoidable hospitalizations, which cost Medicare and Medicaid $7 billion to $8 billion in 2011.

About 45 percent of hospital admissions for Medicare and Medicaid patients receiving care in nursing facilities could be prevented, Centers for Medicare and Medicaid Services (CMS) officials say. Avoidable hospitalization is one of many factors that drives up the cost of care for patients and, in particular, leads to high spending on dually eligible beneficiaries.

The seven organizations involving over 140 facilities will add on-site staff to help the current nursing staff provide preventive services and better monitor patients' medical conditions. The facilities will try to provide more seamless care in order to avoid problems that emerge when patients are moved between a hospital and nursing facility, and they will use more technology to oversee patients. The facilities also agreed to put in place systems that will better monitor the patients' use of prescription drugs, including psychotropic drugs.

The initiative is one of the experiments supported by the CMS Innovation Center and the CMS Medicare-Medicaid Coordination Office, both of which were created by the 2010 health care law (PL 111-148, PL 111-152). The CMS Medicare-Medicaid Coordination Office, has been involved in a number of initiatives aimed at trying to improve the way that the two programs work together.

"We are excited about this partnership and the programs these seven organizations are putting in place to work with nursing facilities to ensure the best possible care for their residents." CMS Acting Administrator Marilyn Tavenner said in a written statement. "We view this initiative and the enhanced level of collaboration it will generate among a variety of providers as the key to reducing costly and avoidable hospitalizations for this population that often has the most complex health care needs."

The recipients were in Alabama, Indiana, Missouri, Nebraska, New York, Nevada, and Pennsylvania.

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